Five Mindful Ways to Create More Business Profit

Whether we’re headed for a recession or not, it’s always a good time to squeak out more profits from your business books. We’re not talking about drastically slashing expenses or spending a lot to raise revenue; the tips in this article are long-term ideas to lift up your profits gently.

Timing on Capital Purchases

The timing of asset purchases, such as equipment, a truck, or even a PC, can be tricky. Understanding the best timing for asset purchases and replacements can make a difference in your profits.

When purchasing a new asset, gain a good understanding of the return on investment so that you’re prepared from a cash flow standpoint. With more complex businesses, it’s a good idea to hire an accountant who knows your industry and has capital expenditure experience.

When replacing an asset, it should be timed so that the asset is replaced before you have to begin spending a lot on repairs, but not so soon that you maximize your use of the current asset. 

Rent and Utility Contracts

When rent and utility contracts come up for renewal, it’s time to negotiate. If your landlord hasn’t fixed something, you can at least use this as an opportunity to have the discussion and hopefully accelerate the repairs.

For certain utility contracts, like internet and phone, the price will often increase when your contract runs out. However, it can also be the best time to ask for a better deal, or even a new customer deal. The adage “it’s always easier to keep a customer than find a new one,” can apply to new carriers, too. Communications companies are constantly creating new deals and packages, so try to jump into one of those to keep your costs from going up.

Profit in Leftovers

What assets do you have that aren’t working for you?  Put them to work!

Here are some examples:

1. Cash – make sure your excess cash is safely invested or at least in an interest-bearing checking or savings account.
2. Extra space – rent out space that you are not using or only using some days. This solution can have many different looks to it beyond the monthly renter. As an example, virtual workers looking for a conference room for a day could be a money-maker for you.
3. Manufacturing firms can sell the scrap from their assembly lines as well as their obsolete inventory.
4. Excess construction materials can be sold, donated, stored for the next job, used on a new small project, or used as firewood.
5. If the inventory on your shelf needs to be dusted, you’ve had it too long. Find a way to move it now, and replace it with something that sells faster.

Training

If employees are wasting time, they are wasting money–yours, to be exact. There are three good solutions:

1. Offer training – perhaps they haven’t been shown what to do correctly or how to do it efficiently. Or maybe they need to break bad habits.
2. Re-energize employees with incentives, new benefits, or motivational training and events.
3. Redesign your processes and automation, then retrain – it could be your workflow needs revamping to make it more efficient. For accounting processes, New Business Directions can help with this!

If these options don’t work, it may be time to face the reality that your employee could be a bad fit. You know what you have to do in that case.

Stop the Subscriptions

Those recurring monthly charges just keep adding up. The average small business uses dozens of apps, meaning they also likely have dozens of $20 to $50 automatic monthly charges going on a credit card somewhere in your business. This includes magazines, memberships, dues, conferences, newsletters, gadgets, and software.

If you’re making a lot of money, you may have trouble finding the time to research what subscriptions you really need versus what you don’t. But in the long run, you will retain more revenue sooner if you sit down and examine this area of spending. Stop the $20 to $50 madness by reassessing what subscriptions you really need and then either opting for the annual subscription discount or canceling the apps that aren’t essential.